題目🚴🏽♂️：Cycles of Credit Expansion and Misallocation: The Good, The Bad and The Ugly
時間🚴🏼♀️𓀃：2017年11月9日（周四）16:00-17:30
Abstract: Financial crises are probably 'credit booms gone wrong', sometimes coined as Minsky moment/cycle. We develop a general equilibrium banking model with heterogeneous firms to analyze the consequences of credit boom. We show that a moderate credit expansion has a non-monotonic impact on the real economy. It raises credit available to the market but deteriorates firm-level productivity distortions. Furthermore, a sufficiently large credit expansion may trigger an inter-bank market crisis, generating a large-scale non-linear effect. The resulting economic recession is greatly exacerbated by the within-sector productivity misallocation. In a dynamic setup, we show that an expansionary credit policy may cause endogenous boom-burst business cycles even though adverse shocks are absent.
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